Tag Archives: economics

Industry 4.0

Self-driving cars + 3d printing + A.I. + Designer babies + Economics = Best Reading Ever! 

In The Fourth Industrial Revolution (2016), Klaus Schwab provides a global economic perspective on how the fourth industrial revolution is changing the way we live, work, consume, and think. Schwab highlights the mega-trends in science and technology which have lead to today’s physical, digital, and biological revolution. These new developments and innovations have significant impact on the economical, political, social, and individual levels.

Some areas of the reading that I found interesting or sparked some insights:

On the nature of work

The on-demand economy:

Projects are being compartmentalised and outsourced to independent workers around the world. ‘A series of transactions between a worker and a company more than an enduring relationship’ (p.47). We can already see this trend in media and other creative industries. Not only do more creative workers establish themselves as freelancers compared to workers in other industries, but this also appears to be the trend in the larger collaborative structure of creative industries e.g. when major production houses from the U.S. outsource visual effects work on their films to Australian companies, or when smaller production companies – who tend to specialise in areas of graphics, sound, and other production areas – collaborate on a larger scale project themselves.

The downside of the human cloud:

I have always been excited about the collaborative, content sharing and networking possibilities opened by crowd-sourcing. ‘Belonging to a global virtual network’ (p.48) is a very appealing thought to me. But it had never occur to me that there was a downside to it. Whilst enabling greater opportunities for skill sharing and more diverse ways of making a living, this new form of employment is currently under-regulated and prone to exploitation as companies are free from the requirements of employment regulation such as minimum wages, taxation, and social benefits. I am not disgusted by this new perspective, but appreciate how complex and delicate this fast-changing, technologically-driven economy is; and how this text has broaden my views on this topic. There is always two sides of a coin to consider. As Schwab summed it up: ‘it all depends on the policy and institutional decisions we make’ (p.49). 

The importance of purpose:

Though this segment was brief, it struck me most personally. Younger generations are beginning to realise and understand the importance of viewing work and life as a unified concept, and the importance of passion and purpose in both. However, as work become more of a sense of purpose and fulfillment in life rather than a means to make ends meet for the younger generation, the economy is evolving to be more compartmentalised, and less personal and communal.

Karl Marx’s concern and Buckminster Fuller’s words contextualises a question I have been trying to figure out since the start of this year: For the past six months or so, I have been thinking hard and thorough about my strengths and weaknesses in terms of my career. I know myself well enough to say that I am thoroughly a generalist. This is my biggest strength as it gives me the ability to intuitively understand the world around me through the relationship of parts. But this is also my biggest weakness as the industry is heading in the opposite direction – particularly in its value of specialisation within the crowd-sourcing and skill sharing landscape. In this regard, I have very little to market professionally.

On the impact on governance

The impact on power:

The fourth industrial revolution has created a world that is more integrated, boundless, and empowering. But these liberations comes at a price. Schwab points out that:

‘With growing citizen empowerment and greater fragmentation and polarization of populations, this could result in political systems that make governing more difficult and governments less effective.’ (p.67)

As evident in the lack of regulation in the new work landscape, governments and legal systems around the world are often struggling to keep up with the fast-growing developments of the online and technological economies. Adding to this delay is the growing public engagement via the empowerment of social networks.

Power is becoming more elusive: 

‘As Moisés Naím puts it, “in the 21st century, power is easier to get, harder to use, and easier to lose.”…With a few exceptions, policymakers are finding it harder to effect change…Micro-powers are now capable of constraining macro-powers such as national governments’ (p.68). 

Whilst social empowerment is a liberty I do not take for granted, social opinion is gradually becoming a red herring among political debates. Leading to political parties trying to winning popularity contests rather than paying attention to game-changing developments and their significance. It is not just new economic systems that need new regulations. As Schwab emphasised, the advancements in the biological sector are the trickiest to regulate. Not only are we absolutely unprepared for the world these developments are leading us towards, but the ontological questions they challenge us with are ones we have not yet been able to successfully define.

Other topics in Schwab’s text that intrigue me greatly on which if I choose to elaborate, this post will not be delivered on time, even with the “backdating” feature…

  • Artificial Intelligence!
  • The Internet of Things!
  • Bioengineering and its ethical implications!
  • Virtual and physical integration!
  • The dynamics of discovery!